My message: as went the U.S., so would go the world at some point in the fairly near future. Peak oil—the inevitable moment when global oil supplies started drying up—would be a watershed for industrial societies, leading to economic contraction, geopolitical crisis, and social upheaval.
So is it time for a retraction? The optics are certainly unfavorable for peak oil theorists like me. Our forecasts obviously failed, in that none of us expected the current surge in U.S. output. But permit me to offer some context.
Everyone agrees that the surge is almost entirely due to tight oil (globally, there has also been growth in bitumen from Canada, deepwater oil, and other unconventional sources). The application of hydrofracturing and horizontal drilling to low-permeability source rocks in the United States represents an amazing success story for the oil industry—at least in terms of raw petroleum output. But what conditions led to this bonanza?
Return with me now to those thrilling days of yesteryear—the year 2005, to be precise. That’s when the rate of world conventional oil production stopped growing and hit a plateau that continues to this day. Oil prices were already scrambling upward; by mid-2008 they had zoomed to nearly $150 per barrel. And it was at that moment that the global financial crisis erupted. Which was, by most accounts, a survival threat to industrial society.
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